Analyst: Lighthammer purchase to result in few enhancements

SAP's recent purchase of Lighthammer will give manufacturers a better view of various IT systems, but it lacks any further functionality, according to an analyst at AMR Research Inc.

SAP's purchase of manufacturing software vendor Lighthammer Software Development Corp. will result in a better

view of various systems, but it fails to provide added functionality, according to an analyst at AMR Research Inc.

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SAP announced late last month that it plans to purchase Exton, Pa.-based Lighthammer, an SAP partner that provides Web-based software used to monitor and manage manufacturing operations. The deal is expected to close this month.

The technology will be packaged and sold as an xApp, a composite application that can be bolted on existing systems.

Lighthammer chief technology officer Rick Bullotta said the company's technology does fill a gap by connecting manufacturing, automation and other proprietary systems with a manufacturer's enterprise resource planning (ERP) suite.

But additional features stop there; at least for now, according to Simon Jacobson, client research analyst at AMR.

"This acquisition demonstrates that there is value in participating in the SAP NetWeaver Partner Program," Jacobson said, in a research brief to AMR clients. "[But] there are still looming questions from users and vendors that SAP will have to answer in the coming weeks."

In addition, Jacobson said Lighthammer's technology lacks a data model, giving other software vendors the ability to sell manufacturing-based applications using Lighthammer as an interface to SAP.

Best-of-breed vendors specializing in a range of products from manufacturing execution software to manufacturing intelligence providers will find it easier to connect their products to SAP systems, Jacobson said. Even Microsoft's SharePoint, which includes collaboration tools and services, a development platform and a portal server can benefit from Lighthammer's connection to SAP, Jacobson said.

"This acquisition will remain visible for the long haul and provide benefit to companies beyond SAP," Jacobson said.

Lighthammer's software suite, called Illuminator, uses Web services to integrate data from plant and enterprise systems. Security features support authentication systems from multiple vendors, including SAP.

Lighthammer's customer base, which is comprised of chemical, food and beverage and discrete applications manufacturers, helped sustain profits and growth, and was attractive to SAP, according to Lighthammer CEO Russ Fadel. He said his role will be to help ensure a smooth transition into SAP and determine a cost-and-sales model for his technology with SAP.

Developers at Lighthammer will also continue to build new features and plan to launch a group of embedded analytic composite applications aimed at manufacturers.

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